Completing the Circle: Trust Negotiations for Circular Economy Between Private Sector and State Actors in Sri Lanka

Circular economy approaches are increasingly promoted within agri-food systems worldwide. In Sri Lanka, this orientation, given also the significant climate change pressures, is reflected in national policy instruments, including the National Action Plan on Plastic Waste Management (2021–2030), the National Roadmap on Urban Food Waste Prevention and Reduction (2021), and the updated Nationally Determined Contributions (2025), which link circular practices to climate mitigation and adaptation priorities. Together, these instruments provide a formal framework for agri-food circular economy implementation. However, the translation of these objectives into operational and scalable solutions from the private sector remains uneven and financial access to scale up solutions is still in its initial stages of development. This paper examines how national policy instruments and their implementation arrangements influence the development and scaling of circular economy solutions in Sri Lanka’s agri-food sector, focusing on how trust, or lack thereof, between enterprises and state actors is shaped through regulatory design and practice. The analysis asks why, despite formal policy commitment, circular economy objectives remain difficult to operationalise at enterprise level, no matter the size. Governance conditions are analysed as the set of institutional, regulatory, and administrative processes through which circular economy, and related, policies are implemented, including mandate allocation and coordination among public authorities, regulatory enforcement practices, administrative and technical capacity, and the compliance pathways for enterprises. Using a case-based governance analysis, the paper draws on sectoral evidence from agri-food value chains, combined with a review of standards, testing, and certifications for traceability and environmental performance. The findings show that fragmented institutional mandates and enforcement responsibilities, limited accredited laboratory and testing capacity, unclear conformity-assessment pathways, and weak extension and advisory services affect regulatory predictability and increase compliance risk for enterprises, particularly micro, small, and medium-sized businesses. The paper shows that circular economy outcomes in the agri-food sector depend on how governance arrangements shape trust, confidence, predictability, and accountability in state–private sector relations. The analysis contributes to the global debate on food policy and governance by demonstrating that implementation practices, rather than policy design alone, largely determine the feasibility of transitions from linear to circular agri-food systems, particularly in low-trust societies.